Returns to search when consumers use and do not use recommendation agents

Abstract

Purpose The purpose of this paper is to investigate returns to search (getting a better product and/or a lower price as a result of search) when consumers use/do not use recommendation agents (RAs). Specifically, it studies the effect of RAs/no RAs on decision quality, decision confidence and decision satisfaction taking into account subjective knowledge (SK) and involvement. Design/methodology/approach This paper employed two between-subjects factorial experimental designs with subjects searching for digital cameras in a simulated online digital camera store. The experiment was conducted with graduate students in Chennai, Bengaluru and Mysore in India. Findings Results of two online experiments showed that when consumers used RAs, low search led to better decision quality, whereas when consumers did not use RAs, medium search led to optimum decision quality. When consumers use RAs, SK had a U-shaped influence on the decision quality indicating that decision quality was the lowest for those with medium SK. When consumers did not use RAs, the effect of SK on decision quality was an inverted U-shape, indicating optimum decision quality for medium SK consumers. When consumers did not use RAs, subjects with high involvement made better choices, whereas when consumers used RAs, low involvement subjects made better choices. However, subjects who searched more had higher decision confidence and decision satisfaction even if their choices were not better. Originality/value The effect of RA vs no RA in conjunction with relevant consumer characteristics influencing decision quality of the consumer is demonstrated in this study. The findings have important managerial, consumer and theoretical contributions to make.